GLOBAL MARKETS-Asian stocks shaky before Powell's speech as growth woes weigh

* Traders await Fed chair Powell's Jackson Hole speech
* Yuan remains at over decade-lows vs dlr, fans trade
worries
* Sterling jumps as traders cling to Merkel's backstop
comments
* Better-than-expected European manufacturing PMIs are
little help
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tomo Uetake
TOKYO, Aug 23 (Reuters) - Asian shares struggled to make any
headway on Friday as weak U.S. manufacturing activity and
uncertainty over how much further the Federal Reserve would cut
rates added to the general air of caution in markets buffeted by
global growth fears.
With political tumult in Hong Kong, Italy and Britain adding
to the tense backdrop, investors were keenly waiting on a speech
by Fed Chairman Jerome Powell later in the day at a gathering of
central bankers in Jackson Hole.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged 0.1% lower, though it was up 0.6% for the
week and on track to break a four-week losing streak.
Japan's benchmark Nikkei .N225 added 0.2% and Australian
stocks .AXJO eased 0.1%, while South Korean shares .KOSPI
shed 0.3% after Seoul said it will scrap an intelligence sharing
agreement with Japan. "It's going to be another wait-and-see day for traders ahead
of Powell's Jackson Hole speech. Investors are hoping for some
soothing words from him," said Hirokazu Kabeya, chief global
strategist at Daiwa Securities.
Wall Street stocks were mixed on Thursday, with the S&P 500
.SPX closing little changed, while the Dow .DJI was up 0.2%
and the Nasdaq .IXIC falling 0.4%. .N
In the U.S. bond market, the closely watched two-year,
10-year Treasury yield curve briefly moved back into inversion
overnight, a shift that also occurred last week and sent
financial markets into a tailspin amid worries of a sharp global
downturn. An inversions in the U.S. yield curve has presaged
several past U.S. recessions, raising fears the decade-long
expansion in the world's biggest economy might be nearing its
end. Overnight, there were more signs of easing momentum as a
survey showed U.S. manufacturing activity contracted for the
first time since September 2009, though better jobless claims
data indicated a resilient labour market. All of that has made Powell's speech in Jackson Hole pivotal
for markets as they look for any clues on future policy easing,
after the Fed last month cut rates for the first time since the
financial crisis. Any indications of hawkishness in the Fed
chief's comments might hurt riskier assets, though the dollar
stands to benefit.
The greenback slipped on Thursday, but moved within narrow
ranges.
In early Asian trading, the dollar was up 0.1% against a
basket of major currencies to 98.249 .DXY .
The euro also was little changed against U.S. currency at
$1.1078. A survey showing a surprise uptick in euro zone
business growth for August was offset somewhat by trade war
fears knocking future expectations to their weakest in over six
years. The pound GBP=D4 jumped to a three-week high of $1.2273
overnight after traders interpreted comments from German
Chancellor Angela Merkel to mean that a solution to the Irish
border problem could be found before Britain leaves the European
Union on Oct. 31. Merkel on Wednesday challenged Britain to come up with
alternatives to the Irish border backstop within 30 days, but
French President Emmanuel Macron cautioned there would be no
renegotiation of the Brexit deal. Sterling last
quoted at $1.2244, almost flat on the day.
China's yuan, which slid to fresh 11-1/2-year lows on
Thursday despite support from major state-owned banks in both
the spot and forwards markets, maintained its weak tone against
the dollar amid worries about the deepening Sino-U.S. trade war.
Onshore spot yuan CNY=CFXS ended the domestic session down
0.3% at 7.0875 per dollar, its weakest such close since March
14, 2008. In early trade, the offshore yuan CNH=D4 stood at 7.0924
to the dollar, little changed on the day.
Oil prices weakened overnight, with both Brent crude and
U.S. West Texas Intermediate down 0.6% each, on worries about
the global economy. O/R
Brent crude LCOc1 was last up 0.2% at $60.02 per barrel
and WTI crude CLc1 added 0.1% to $55.38.
Gold prices dipped on Thursday but held near the pivotal
level of $1,500 per ounce, underpinned by continued demand for
the precious metal amid uncertainties around monetary policy,
trade and geopolitical tensions. GOL Spot gold XAU= was last
down 0.2% at $1,496.00 an ounce.